Posted: 08 March 2013 1226 hrs

SINGAPORE

Resale prices of private non-landed homes increased 2.7 per cent in February when compared with January 2013, according to flash estimates put out by the Singapore Real Estate Exchange (SRX).

SRX compiles data from 11 top property agencies in Singapore.

Leading the rise were properties in the suburbs. Resale prices of non-landed private homes in those areas rose surged 5.1 per cent on-month to an average of S$1,046 per square foot in February, exceeding S$1,000 per square foot for the first time.

Lee Lay Keng, Associate Director – Research, DTZ Debenham Tie Leung (SEA) Pte Ltd, said: “Buyers are lowering their budgets, so that’s why you are seeing there is a little bit more demand for apartments outside the central region or the city fringe areas where the overall quantum of houses is a bit lower. It is a bit less affected as opposed to apartments in the core central region because now they have to pay the higher stamp duty as well as the larger cash down payments.”

In the city fringes, resale prices rose 3.5 per cent on-month to S$1,272 per square foot.

In contrast, resale private homes in the city or the core central region saw a decline of 4.7 per cent month-on-month to reach an average per square foot of S$1,788.

Eugene Lim, Key Executive Officer, ERA, said: “There is still no urgency to cut prices – holding cost is not high, interest rate has not risen, economy is still positive. If you look at February transactions compared to January, you find that the volume has taken a dip. It is only 50 percent of what is done in January.”

Despite price gains, only 325 resale transactions were recorded in February – a drop of more than 50 per cent compared to January 2013. This was attributed to the Lunar New Year holidays in February.

Meanwhile, rental prices for non-landed private homes in February dropped by 1.3 per cent compared with January. Rentals softened across all three regions, with units in city fringes recording the sharpest drop of 1.9 per cent. The mass market segment saw rentals fall 1.6 per cent, while the core central region reported a 0.4 per cent dip.

SRX said small private apartments, commonly known as shoebox units in Singapore, bucked the trend of softening rentals for the entire non-landed residential market.

Rentals of shoebox units rose 1.8 per cent in February. Units in the suburbs enjoyed a 101 per cent rental price premium in per square foot terms over larger homes in the same areas.

Meanwhile, shoebox units in the city recorded a 63.0 per cent rental price premium while those in the city fringes were rented at a premium of 66.8 per cent, compared to larger homes in the same areas.

In the HDB resale market, overall cash-over-valuation (COV) dropped S$3,000 in February to reach S$32,000. SRX said this was the lowest monthly COV observed since Sep 2012.

Overall median resale price also declined 2.2 per cent to S$450,000 from January. HDB median rents remained unchanged at S$2,400.

– CNA/xq/ch